LACEY - About 250 Venture Financial Group employees who were invested in retirement plans that held company stock lost an average of nearly $50,000 each during a key period before Venture Financial's primary asset, Venture Bank, closed.
That’s according to Andrew Volk, an attorney at Hagens Berman Sobol Shapiro LLP, the Seattle-based law firm that filed a class-action lawsuit in U.S. District Court last month on behalf of employees against Venture Financial Group and its former directors.
Hagens Berman specializes in alleged violations of the Employee Retirement Income Security Act and has represented former employees in cases against Washington Mutual (now operated by JPMorgan Chase) and Enron Corp., the Houston-based natural gas and gas-trading company that collapsed into bankruptcy during the early part of the decade.
Venture Financial is the former parent company to Venture Bank, a 30-year-old South Sound community bank that was closed by state and federal regulators and sold to First-Citizens Bank & Trust. Co. of North Carolina on Sept. 11. Venture Financial previously had its headquarters in DuPont, but Securities and Exchange Commission filings show that Venture Financial today has an address in Lacey.
The lawsuit was filed on behalf of Sandi Wilson and Synthia Lisi, two Olympia women who are former employees at the company, Volk said Friday. Wilson and Lisi were not available for comment, he said.
The lawsuit alleges that from Jan. 1, 2008, to Sept. 11, 2009, the company and its directors failed to carefully manage employee stock ownership and 401(k) plans and made unnecessarily risky investments that caused company stock to fall. About 250 employees were invested in both plans and lost about $12 million, according to the lawsuit. Among the risky investments cited in the suit was investing in preferred shares of Freddie Mac and Fannie Mae, shares that fell in value and resulted in the company absorbing a $40 million loss last year. Volk acknowledged that investing in the two mortgage giants was considered a safe investment at one time, but he thinks Venture Financial held that position for too long.
Meanwhile, employees had little flexibility in selling company stock in their retirement plans, Volk said.
“During most of the class period (January 2008 to September 2009), there were few people who could get out,” he said.
Since the filing, some directors have acknowledged receiving the lawsuit, Volk said. They are A. Richard Panowicz, Catherine Mosby, Patricia Graves, Keith Brewe, Sandra Sager and Larry Schorno. Those pending are Ken Parsons Sr., Jim Arneson, Lowell Bridges, Linda Buckner, Patrick Martin and Jewell Manspeaker.
Graves, who now works as the area executive for First Citizens Bank, could not be reached Friday.
As part of the case, attorneys also will check into whether executives and directors unloaded company stock, Volk said.
Defendants in the coming weeks likely will file motions to dismiss the case, but Volk thinks the case will withstand those efforts.
“We feel like it’s a very strong case,” he said.